Corporate Governance Report 30 June 2017 Situation at 30 June 2017

3 Preliminary remarks

4 1. Board of Directors (1) 1.1 Members of the Board of Directors 1.2 Professional background and other activities and functions 1.3 Mandates outside Nestlé 1.4 Elections and terms of office 1.5 Internal organisational structure

12 2. Executive Board 2.1 Members of the Executive Board 2.2 Professional background and other activities and functions 2.3 Mandates outside Nesté 2.4 Management contracts

17 General Organisation of Nestlé S.A.

(1) The full Board of Directors Regulations and Committee Charters are published on www.nestle.com/investors/ corporate-governance/boardcommittees

2 Nestlé Corporate Governance Report June 2017 Preliminary remarks

Nestlé S.A. publishes a full Corporate Governance Report Further information and Compensation Report, which forms an integral part For additional information contact: of the Annual Report. We therewith comply with the Nestlé S.A. requirements of the SIX Swiss Exchange (SIX) and its Investor Relations Corporate Governance Directive. Avenue Nestlé 55 The present document is a partial update of the Nestlé 1800 Vevey Corporate Governance Report 2016, indicating changes Switzerland occurred on the Board of Directors and the Executive Board tel. +41 (0)21 924 35 09 up to 30 June 2017. fax +41 (0)21 924 28 13 The Annual Report is available on-line as a PDF file at e-mail: [email protected] http://www.nestle.com/investors/annual-report in English, French and German. As to information concerning the share register (registrations, transfers, dividends, etc.), please contact: Nestlé S.A. Share Transfer Office Zugerstrasse 8 6330 Cham Switzerland tel. +41 (0)41 785 20 20 fax +41 (0)41 785 20 24 e-mail: [email protected]

Nestlé Corporate Governance Report June 2017 3 Board of Directors

1. Board of Directors 1.1 Members of the Board of Directors (*)

First Name Year of birth Nationality Education/Qualifications (a) Election Expires (b) Paul Bulcke 1954 Belgian/Swiss Economics and Business 2008 2018 Chairman Administration Ulf Mark Schneider 1965 German/ Economics, Business Administration 2017 2018 CEO American and Finance & Accounting Andreas Koopmann 1951 Swiss Mechanical Engineering 2003 2018 Vice Chairman and Business Administration Henri de Castries 1954 French HEC, Law degree and ENA 2012 2018 Lead Independent Director (c) Beat Hess 1949 Swiss Law 2008 2018 Renato Fassbind 1955 Swiss Economics, Business Administration 2015 2018 and Accountancy Steven G. Hoch 1954 American/Swiss International Relations 2006 2018 and Economics Naïna Lal Kidwai 1957 Indian Economics and Business 2006 2018 Administration Jean-Pierre Roth 1946 Swiss Economics and Finance 2010 2018 Ann M. Veneman 1949 American Law and Public Policy 2011 2018 Eva Cheng 1952 Chinese Business Administration, History 2013 2018 Ruth K. Oniang’o 1946 Kenyan Food Science and Human Nutrition 2015 2018 Patrick Aebischer 1954 Swiss Medicine and Neuroscience 2015 2018 Ursula M. Burns 1958 American Mechanical Engineering 2017 2018 (*) Peter Brabeck-Letmathe left the Board of Directors on 6 April 2017. (a) For more complete information on qualifications: please refer to section 1.2 and the individual CVs on www.nestle.com/investors/corporate-governance/management/boardofdirectors (b) All Board members are elected annually in accordance with Swiss Corporate law and Nestlé S.A.’s Articles of Association. (c) The Lead Independent Directors assumes the role of a prime intermediary between the Board and the Chairman. He may convene and he chairs Board meetings and “in camera” sessions where the Chairman is not present or conflicted.

1.1.1 Management tasks of the members of its principal subsidiaries or as employee or affiliate of the of the Board of Directors Group’s external auditor for the past three years and does not With the exception of Ulf Mark Schneider, all members maintain, in the sole determination of the Board, a material of the Board of Directors are non-executive members. direct or indirect business relationship with the Company Paul Bulcke is active Chairman and has certain responsibilities or any of its subsidiaries. Directors with immediate family for the direction and control of the Group including Nestlé members who would not qualify as independent shall not Health Science S.A., Nestlé Skin Health S.A. and Nestlé’s be considered independent, subject to a three-year cooling- engagement with L’Oréal. off period. Subject to specific exceptions granted by the Board, 1.1.2 Information on non-executive members members are subject to twelve-year term limits. of the Board of Directors With the exception of Paul Bulcke, all non-executive 1.1.3 Cross-involvement members of the Board of Directors are independent, were None. not previously members of the Nestlé management and have no important business connections with Nestlé. Pursuant to Nestlé’s Board Regulations, a Director shall be considered independent, if he is not and has not been employed as an executive officer at theCompany or any

4 Nestlé Corporate Governance Report June 2017 Board of Directors

1.2 Professional background and other activities As a representative of Nestlé, Mark Schneider serves and functions (*) as Co-Chairman of the Board of Directors of Cereal Partners Worldwide S.A., Switzerland. Paul Bulcke Furthermore, he is a member of the Board of the Consumer Chairman Goods Forum and a member of the Advisory Board of the Paul Bulcke began his career in 1977 Swiss Innovation Park. as a financial analyst for Scott Graphics International in Belgium before moving Andreas Koopmann to the Nestlé Group in 1979 as Vice Chairman a marketing trainee. From 1980 to Andreas Koopmann began his career 1996, he held various responsibilities in in 1979 as Assistant to the Chairman Nestlé Peru, Nestlé Ecuador and Nestlé Chile before moving and CEO of Bruno Piatti AG, Switzerland, back to Europe as Managing Director of Nestlé Portugal, and from 1980 to 1982 was Assistant Nestlé Czech and Slovak Republic, and Nestlé Germany. to the Group Executive at Motor In 2004, he was appointed Executive Vice President, Columbus AG, Holding, Switzerland. responsible for Zone Americas. In April 2008, Paul Bulcke From 1982, he was at Bobst Group, starting as Vice was elected member of the Board of Directors of Nestlé S.A. President of Engineering and Manufacturing in Roseland, and the Board appointed him Chief Executive Officer (CEO). New Jersey, USA. In 1989, he returned to Switzerland, As of 31 December 2016, Paul Bulcke relinquished his holding a number of senior positions in the company, function as CEO remaining member of the Board of Directors. including member of the Group Executive Committee in At the Annual General Meeting of Shareholders in April 2017, charge of Manufacturing. He was a member of the Board Paul Bulcke was elected Chairman of the Board of Directors of Directors for Bobst Group from 1998 to 2002 and was of Nestlé S.A. appointed CEO in 1995, a position he held until May 2009. As a Nestlé S.A. representative, he serves as Vice Chairman From 2010 to 2012, Andreas Koopmann was Chairman of on the Board of L’Oréal S.A., France. Alstom (Suisse) S.A. and Country President. Paul Bulcke is also a Board member of Roche Holding Ltd., Presently, he serves as Chairman of Georg Fischer AG, Switzerland. as a Board member of Credit Suisse Group, the CSD Group, In addition, he is a member of the Board of Trustees of as well as of Sonceboz SA. Andreas Koopmann is also Avenir Suisse, Switzerland, the European Round Table of a member of the Board of Directors of economiesuisse. Industrialists (ERT), Belgium, the IMD Foundation Board as well as of the International Business Council of the World Henri de Castries Economic Forum (WEF). Lead Independent Director Henri de Castries started his career in Ulf Mark Schneider the French Finance Ministry Inspection CEO Office, auditing government agencies Mark Schneider started his career in from 1980 to 1984. In 1984, he joined several senior executive positions since the French Treasury Department. 1989 with Haniel Group, Germany. As of 1989, he joined AXA Corporate In 2001 he joined Fresenius Medical Finance Division. Two years later, he was appointed Senior Care as Chief Financial Officer and Executive Vice President for the Group’s asset management, became CEO of Fresenius Group, financial and real-estatebusiness. Henri de Castries was Germany in 2003, a function he relinquished in 2016. As from Chairman of the AXA Management Board from May 2000 January 2017, Mark Schneider has been appointed Chief to April 2010. Since April 2010, following a modification of Executive Officer (CEO) of Nestlé S.A. At the Annual General the corporate governance structure, he was Chairman and Meeting of Shareholders in April 2017, Mark Schneider was CEO of AXA, functions he relinquished in 2016. elected member of the Board of Directors of Nestlé S.A. In March 2016, Henri de Castries joined the Board of HSBC Holdings Inc.

(*) Mandates and functions are listed in the following order: (1) mandates in listed companies, (2) mandates in non-listed companies, (3) mandates held at the request of Nestlé or companies controlled by it, (4) mandates held in associations, charitable organizations, foundations, trusts and employee welfare foundations.

Nestlé Corporate Governance Report June 2017 5 Board of Directors

Beat Hess Steven G. Hoch Beat Hess started his career in 1977 Steven G. Hoch started his career in at BBC Brown Boveri Ltd in Baden as 1978 at the Chemical Bank in New York Legal Counsel where he was promoted and Zurich, where he held a series to General Counsel in 1986. From 1988 of positions in commercial banking, to 2003, he was Senior Group Officer, principally advising multinational General Counsel and Secretary for companies. Steven G. Hoch was ABB Ltd in Zurich. From 2003 until his Senior Vice President at Bessemer retirement in January 2011, Beat Hess was Group Legal Trust Company, N.A., New York, from 1990 to 1994, and Director and a member of the Group Executive Committee a member of the Executive Committee at Pell Rudman of Royal Dutch Shell plc, The Hague, The Netherlands. Trust Company, Boston, from 1994 to 2002. Since 2002, Beat Hess is Chairman of LafargeHolcim Ltd and he served as a founder and CEO of Highmount Capital LLC, Vice Chairman of Sonova Holding AG, Switzerland. He is a US-based investment management and fiduciary firm. also a member of the Curatorium of The Hague Academy In 2015, Highmount joined Brown Advisory LLC, where of International Law. he serves as a Partner and a member of the International Advisory Board. Renato Fassbind Steven G. Hoch is Chairman Emeritus of the American Renato Fassbind started his career Swiss Foundation and serves as Chairman of the Corporation in 1982 as Managing Director of Board of the Woods Hole Oceanographic Institution, USA. Kunz Consulting AG. From 1984 until He served two terms as a member of the National Board of 1990 he was Auditor and ultimately the Smithsonian Institution, USA, and is an Advisory Board Head of Internal Audit at member of the Smithsonian Tropical Research Institute, F. Hoffmann-La Roche AG. Panama. Renato Fassbind then joined ABB Ltd and served between 1990 – 1997 as Head of Corporate Staff Naïna Lal Kidwai Audit, and then as Chief Financial Officer and member of Naïna Lal Kidwai started her career the Executive Board from 1997 to 2002. Subsequently, he in 1982 and until 1994 was at ANZ joined Diethelm Keller Holding AG as Chief Executive Officer Grindlays Bank Plc. From 1994 to from 2002 to 2004. He joined Credit Suisse Group AG as 2002, she was Vice Chairman and Chief Financial Officer and member of the Executive Board Head of Investment Banking at Morgan from 2004 until 2010. Stanley India before moving to HSBC, Currently Renato Fassbind serves as Vice Chairman of where she was Chairman of the HSBC the Board of Directors of Swiss Re AG, is the Chairman of Group of Companies in India and its Audit Committee and member of its Compensation on the Board of HSBC Asia Pacific, until her retirement Committee. Furthermore, Renato Fassbind sits on the Board in December 2015. She was elected President of the of Kühne + Nagel International AG and is a member of its Federation of Indian Chambers of Commerce & Industry Audit Committee. (FICCI) for 2013. Naïna Lal Kidwai is Chairman of Max Financial Services Ltd and a non-Executive Board member of Cipla Ltd., Larsen&Toubro Ltd., India and Altico India Pvt Ltd. She serves the BRICS Business Council and South Asia Advisory Board of the Harvard Business School, where she is also a Global Advisor. Other engagements include the Advisory Boards of Oxford University India Center, NCAER (National Council of Applied Economics Research) and the US India Innovation Forum Steering Committee. Her interests in the environment include being Chair of the Sustainability Council & Energy Mission at FICCI, Chair of the India Sanitation Coalition, Board member of Shakti Sustainable

6 Nestlé Corporate Governance Report June 2017 Board of Directors

Energy Foundation and a commissioner for the global In 2009, she was named to Forbes The World’s commission on the Economy and Climate. 100 Most Powerful Women list, and she has been the Naïna Lal Kidwai was given the Padma Shri Award by the recipient of numerous awards and honours throughout Indian government in 2007 for her contribution to trade and her career. industry and has been recognised in India and abroad with Ann M. Veneman also serves as member of the Nestlé awards and rankings in lists of top women in business. CSV Council.

Jean-Pierre Roth Eva Cheng Jean-Pierre Roth spent his whole Eva Cheng joined Amway Corporation career at the Swiss National Bank, – a US-based global consumer product which he joined in 1979. After various company – in 1977 as an Executive senior positions, he was appointed Assistant in Hong Kong and moved a member of the Governing Board to become Corporate Executive Vice in 1996 before becoming its Chairman President in 2005 responsible for in 2001 until 2009. From 2001 he was Greater China and Southeast Asia a member of, and since 2006 the Chairman of the Board Region, a position she held until her retirement in 2011. of Directors of the Bank of International Settlements until Eva Cheng is most well known for leading Amway’s his retirement in 2009. Jean-Pierre Roth also served as entry into China in 1991. She also held Amway China’s Swiss Governor of the International Monetary Fund from Chairperson and CEO position since market launch until 2001 until 2009 and as a Swiss representative on the her retreat in 2011. Financial Stability Board from 2007 until 2009. In 2008 and 2009, Eva Cheng was twice named to As of 2010, Jean-Pierre Roth has been a member of the Forbes The World’s 100 Most Powerful Women list. She Board of Swatch Group. had also received numerous awards and honours for her In May 2014, he joined the Board of MKS (Switzerland) SA, business leadership and community service. a company active in gold processing and trading. Furthermore, Presently, Eva Cheng serves on the Boards of Trinity Jean-Pierre Roth is a member of the Advisory Board of the Limited, Haier Electronics Group Co. Ltd. in Hong Kong, University of Geneva, the Feris Endowment Fund IHEI, China, and Amcor Ltd., Australia. She is also the Executive Geneva, the Foundation Board and Programme Committee Director of the Our Hong Kong Foundation, a member of the of Avenir Suisse, Switzerland, and the Foundation of the Swiss Executive Committee of the All-China Women’s Federation, Pontifical Guard, Vatican City. a Director of China Children and Teenagers Foundation, a Member of the China People’s Political Consultative Ann M. Veneman Conference – Guangdong Commission and a Permanent An attorney by training, Ann M. Veneman Honorary Director of the Chinese General Chamber of was Secretary of the United States Commerce in Hong Kong. Department of Agriculture (USDA) from 2001 to 2005. She then served Ruth K. Oniang’o a five-year term as the Executive Ruth K. Oniang’o was formerly Director of the United Nations Children’s Professor of Food Science and Fund. Earlier in her career she practiced Nutrition at Jomo Kenyatta University law and was in various positions in the USDA. She also of Agriculture and Technology, Nairobi, served four years as the Secretary of the California Kenya, and is adjunct Professor of Department of Food and Agriculture. She is currently Nutrition at Tufts University, USA. She a member of the Boards of Alexion Pharmaceuticals, the is also Founder and Executive Director Global Health Innovative Technology Fund and JUST Capital. of the Rural Outreach Program Kenya, as well as She is on a number of advisory boards including BRAC, Founder and Editor-in-Chief of the African Journal of Food, Terra Vesco, The Feed Project, The Chicago Council Global Agriculture, Nutrition and Development (AJFAND). Agriculture Development Initiative and the Clinton Health She has steered the development of nutrition policies Access Initiative. She is a member of the Council on Foreign across Africa and advocated for healthy diets globally. She Relations and the Trilateral Commission. has special focus on maternal and child nutrition.

Nestlé Corporate Governance Report June 2017 7 Board of Directors

Ruth K. Oniang’o is a former Member of Parliament in Kenya Ursula M. Burns and she works in rural developments focused on women Ursula M. Burns joined Xerox in 1980 smallholder farmers, and the youth. and advanced through engineering and Furthermore, she chairs the Boards of the Sasakawa manufacturing functions to leadership Africa Association (SAA) and the Sasakawa Africa Fund positions in manufacturing, operations for Extension Education (SAFE). Other engagements include and product development. From 2009 being a Board member of the USTADI Foundation, Kenya, to 2016 Ursula M. Burns was Chief and a Trustee of the Board of CABI Centre for Agriculture Executive Officer (CEO) of Xerox. Since and Biosciences International. 2010, she is the Chairman of the Board of Xerox Ruth K. Oniang’o also serves as a member of the Nestlé Corporations, USA. She also serves on the Boards of CSV Council. Furthermore, she has earned a distinguished American Express Company, Exxon Mobil Corporation and service medal from the Government of Kenya. Datto, Inc., USA. Furthermore, Ursula M. Burns also provides leadership Patrick Aebischer counsel to various community, educational and non-profit Patrick Aebischer was trained as organisations including the Massachusetts Institute of an MD and neuroscientist at the Technology, NAF (National Academy Foundation) and FIRST University of Geneva and the (For Inspiration and Recognition of Science and Technology), University of Fribourg, Switzerland. the Mayo Clinic and the Ford Foundation. He is a Professor in neurosciences Ursula Burns is a member of the National Academy of and Director of the Neurodegenerative Engineerning and the American Academy of Arts and Disease Research Laboratory at Sciences. the Brain Mind Institute EPFL. From 1984 to 1992, he worked at Brown University, USA, as Research Scientist, Assistant and then Associate Professor of Medical Sciences. In 1992, he returned to Switzerland as a Professor and Director of Surgical Research Division and Gene Therapy Center at the University Hospital of Lausanne (CHUV). From 2000 to end 2016, Patrick Aebischer is the President of the Swiss Federal Institute of Technology Lausanne (EPFL). Furthermore, Patrick Aebischer is founder of three start-ups: CytoTherapeutics Inc. (1989), Modex Therapeutics Inc. (1996) and Amazentis SA (2007). Currently, he serves as Board member of Lonza Group Ltd, and Logitech International S.A. and is Chairman of the Advisory Board of the Novartis Venture Fund. Furthermore, Patrick Aebischer is a member of the Foundation Boards of the Verbier Festival and the Montreux Jazz Festival, Switzerland.

8 Nestlé Corporate Governance Report June 2017 Board of Directors

1.3 Mandates outside Nestlé 1.4 Elections and terms of office Pursuant to art. 21sexies of the Articles of Association (*), Pursuant to art. 6 par. 2 of the Articles of Association, the no member of the Board of Directors may hold more than General Meeting has the competence to elect and remove 4 additional mandates in listed companies and 5 additional the members of the Board of Directors. mandates in non-listed companies. The Chairman of the Board of Directors, the members The following mandates are not subject to these of the Board of Directors and the members of the limitations: Compensation Committee are elected individually by the a) mandates in companies which are controlled by Nestlé; General Meeting for a term of office until completion of b) mandates which a member of the Board of Directors the next Annual General Meeting (art. 15 of the Articles holds at the request of Nestlé or companies controlled of Association). by it. No member of the Board of Directors shall hold Members of the Board of Directors whose term of office more than 10 such mandates; and has expired are immediately eligible for re-election. c) mandates in associations, charitable organizations, The Board of Directors elects one or two Vice Chairmen foundations, trusts and employee welfare foundations. and the members of the Committees other than the No member of the Board of Directors shall hold more Compensation Committee. than 10 such mandates. The term of office of a Board member shall expire no later than at the Annual General Meeting following Mandates shall mean mandates in the surpreme governing the member’s 72nd birthday. body of a legal entity which is required to be registered Rules in the Articles of Association are compliant with in the commercial register or a comparable foreign register. the statutory legal provisions with regard to the appointment Mandates in different legal entities which are under joint of the Chairman, the members of the Compensation control are deemed one mandate. Committee and the independent proxy. The Board of Directors has promulgated regulations For the principles of the selection procedure, see that determine additional restrictions. point 1.5.2 below (Nomination and Sustainability Committee). All members of the Board of Directors comply with the For the time of first election and term of office, see provisions set out in art. 21sexies. point 1.1 above.

(*) Nestlé S.A.’s Articles of Association can be found on www.nestle.com/investors/corporate-governance/articles

Nestlé Corporate Governance Report June 2017 9 Board of Directors

1.5 Internal organisational structure 1.5.1 Allocation of tasks within the Board of Directors

Chairman’s Nomination and and Corporate Compensation Sustainability Audit Governance Committee Committee Committee Committee

Paul Bulcke • (Chair) • Chairman Ulf Mark Schneider • CEO Andreas Koopmann • • Vice Chairman Henri de Castries • • (Chair) • Lead Independent Director Beat Hess • • (Chair) Renato Fassbind • • (Chair) Steven G. Hoch • Naïna Lal Kidwai • Jean-Pierre Roth • Ann M. Veneman • Eva Cheng • Ruth K. Oniang’o Patrick Aebischer • Ursula M. Burns

1.5.2 Tasks and area of responsibility for each While the Committee has limited authority as per the Board Committee of the Board of Directors (1) Regulations, it may in exceptional and urgent matters deal The powers and responsibilities of each Committee are with business matters which might arise between Board established in the applicable Committee Charter, which meetings. In all cases it keeps the Board fully appraised. is approved by the Board. Each Committee is entitled to It reviews the Board’s annual work plan. engage outside counsel. The Compensation Committee consists of the Vice The Chairman’s and Corporate Governance Committee Chairman and a minimum of two other non-executive consists of the Chairman, any Vice Chairman, the Lead members of the Board. All members are independent Independent Director, the CEO (Administrateur délégué) (art. 19bis par. 1 of the Articles of Association). The members and any other member elected by the Board. It liaises of the Compensation Committee are elected individually between the Chairman and the full Board of Directors in by the General Meeting for a term of office until completion order to act as a consultant body to the Chairman and of the next Annual General Meeting. Members of the to expedite whenever necessary the handling of the Compensation Committee whose term of office has expired Company’s business. The Committee regularly reviews are immediately eligible for re-election. The Compensation the corporate governance of the Company and prepares Committee determines the system and principles for recommendations for the Board. It also advises on certain remuneration of the members of the Board of Directors and finance-related matters including the Company’s financing submits them to the Board for approval. It oversees and and financial management and periodically reviews its asset discusses the remuneration principles for Nestlé S.A. and and liability management. the Nestlé Group. It prepares the proposals of the Board to be submitted for approval by the General Meeting in relation

(1) For complete information please refer to the Board of Directors Regulations and Committee Charters on www.nestle.com/investors/corporate-governance/boardcommittees

10 Nestlé Corporate Governance Report June 2017 Board of Directors

to the compensation of the Board of Directors and the The Audit Committee consists of a Chairperson, who is Executive Board. In addition, it proposes the remuneration an independent and non-executive member of the Board, of the Chairman and the CEO, and approves the individual and a minimum of two other non-executive members of remuneration of the members of the Executive Board. the Board, excluding the CEO and any former member of It reports on its decisions to the Board and keeps the Board the Executive Board. All members shall be independent. updated on the overall remuneration policy of the Nestlé At least one member has to have recent and relevant financial Group. It reviews the Compensation Report. expertise, the others must be familiar with the issues of accounting and audit. In discharging its responsibilities, The Nomination and Sustainability Committee consists it has unrestricted access to the Company’s management, of a Chairperson, who is an independent and non-executive books and records. The Audit Committee supports the member of the Board, preferably the Lead Independent Board of Directors in its supervision of financial controls Director; the other members are the Chairman of the Board through a direct link to KPMG (external auditors) and the of Directors and a minimum of two independent and Nestlé Group Audit (corporate internal auditors). non-executive members of the Board. The Nomination The Audit Committee’s main duties include the following: and Sustainability Committee oversees the long-term –– to review, and challenge where necessary, the actions succession planning of the Board, establishes the principles and judgements of management, in relation to the and criteria for the selection of candidates to the Board, Company’s year-end financial accounts; performs a regular gap analysis, selects candidates for –– to make recommendations to the Board of Directors election or re-election to the Board and prepares a proposal regarding the nomination of external auditors to be for the Board’s decision. The nomination process for the appointed by the shareholders; Board of Directors is highly structured and seeks to ensure –– to discuss the audit procedures, including the proposed a balance of necessary competencies and an appropriate scope and the results of the internal and external audit; diversity of its members. It ensures an appropriately wide –– to keep itself regularly informed on important findings net is cast on key successions. The candidates to the Board of the audits and of their progress; must possess the necessary profile, qualifications and –– to oversee the quality of the internal and external auditing; experience to discharge their duties. Newly appointed –– to present the conclusions on the approval of the Financial Board members receive an appropriate introduction into Statements to the Board of Directors; the business and affairs of the Company and the Group. –– to review certain reports regarding internal controls and If required, the Nomination and Sustainability Committee the Group’s annual risk assessment. arranges for further training. The Nomination and Sustainability Committee reviews, The Audit Committee regularly reports to the Board on its at least annually, the independence of the members of the findings and proposes appropriate actions. The responsibility Board as well as their outside mandates, and prepares the for approving the annual Financial Statements remains with annual self-evaluation of the Board and its Committees. the Board of Directors. Furthermore, it reviews reports and gives advice on measures which ensure the long-term sustainability of the Company in its economic, social and environmental dimension and monitors the Company’s performance against selected external sustainability indexes. It reviews the annual Nestlé in society report and discusses periodically how other material non-financial issues affect the Company’s financial performance and how its long-term strategy relates to its ability to create shared value. It reviews as well the Company’s shareholder base and other significant stakeholders and their material interests. It meets as frequently as necessary to fulfil its tasks and prepares the relevant in camera sessions of the Board of Directors.

Nestlé Corporate Governance Report June 2017 11 Executive Board

2. Executive Board 2.1 Members of the Executive Board

Name Year of birth Nationality Education/Current function Ulf Mark Schneider 1965 German/ Economics, Business Administration American and Finance & Accounting CEO: Nestlé S.A. Laurent Freixe 1962 French Business Administration EVP & CEO: Zone Americas Chris Johnson 1961 American Economics and Business Administration EVP: Nestlé Business Excellence Patrice Bula 1956 Swiss Economics and Business Administration EVP: Strategic Business Units, Marketing, Sales and Nespresso Wan Ling Martello 1958 American Business Administration and Accountancy, Postgraduate in Management Information Systems EVP & CEO: Zone Asia, Oceania and Sub-Saharan Africa Stefan Catsicas 1958 Swiss Natural Sciences and Postgraduate in Neurosciences EVP: Chief Technology Officer: Innovation, Technology and R & D Marco Settembri 1959 Italian Business Administration EVP & CEO: Zone Europe, Middle East and North Africa François-Xavier Roger 1962 French Business Administration and Accounting EVP: CFO (includes Finance and Control, Legal, IP, M&A,Tax, Treasury, Investor Relations) Magdi Batato 1959 Swiss Mechanical Engineering and PhD in Thermodynamics EVP: Operations Peter Vogt 1955 Swiss Economics and Finance & Accounting Deputy EVP: Human Resources Heiko Schipper 1969 Dutch Business Economics Deputy EVP: Nestlé Nutrition Maurizio Paternello 1966 Italian Business Administration Deputy EVP: Nestlé Waters Grégory Behar 1969 Swiss Mechanical Engineering and Business Administration CEO: Nestlé Health Science David P. Frick 1965 Swiss Law SVP: Corporate Governance, Compliance and Corporate Services

(EVP: Executive Vice President; SVP: Senior Vice President, CEO: Chief Executive Officer) For complete information, please refer to individual CVs on www.nestle.com/investors/corporate-governance/management/executiveboard

12 Nestlé Corporate Governance Report June 2017 Executive Board

2.2 Professional background and other activities Patrice Bula and functions (*) Patrice Bula joined Nestlé S.A. in 1980 and was entrusted with various Ulf Mark Schneider responsibilities in Marketing and Sales Please refer to point 1.2 above. in Kenya, Japan and Taiwan before being promoted to Market Head for Laurent Freixe Taiwan in 1992, Market Head for Laurent Freixe joined Nestlé France in Czech Republic in 1995, then Head for 1986 as a sales representative and got the South and Eastern Africa Region in 1997. In 2000, increasing responsibilities in the field he was appointed Head of Chocolate, Confectionery of sales and marketing. In 1999, he and Biscuits Strategic Business Unit based at Nestlé’s became a member of the Management International Headquarters in Vevey. In October 2003, Committee and was nominated Head Patrice Bula was transferred as Market Head of Nestlé of the Nutrition Division. In 2003, Germany and in August 2007 he took up the role as Laurent Freixe became Market Head of Nestlé Hungary. Market Head for the Greater China Region. In January 2007, he was appointed Market Head of the As of May 2011, Patrice Bula was appointed to the Iberian Region taking responsibility for Spain and Portugal. Executive Board of Nestlé S.A. as Executive Vice President From November 2008 to October 2014, Laurent Freixe with responsibility for the Strategic Business Units, Marketing served as Executive Vice President in charge of Zone Europe. and Sales, and Nespresso. Effective October 2014, he was appointed Executive Patrice Bula serves on the Boards of Schindler Holding Ltd. Vice President for Zone Americas. and Bobst Group SA, both in Switzerland. As a representative of Nestlé, he is a member of the Board As a representative of Nestlé, Patrice Bula serves as of Directors of Cereal Partners Worldwide S.A., Switzerland, a Board member of Beverage Partners Worldwide S.A., and of the Regional Board of Directors of the Consumer of Cereal Partners Worldwide S.A., Switzerland, and of Goods Forum in Latin America. Froneri Ltd., UK. He is a Board member of both Yinlu Food Group Chris Johnson Companies and Hsu Fu Chi Group Companies, China. Chris Johnson started his career with Nestlé in 1983 as a marketing Wan Ling Martello trainee at Carnation Inc. During his Wan Ling Martello joined Nestlé S.A. first eight years, he took on increasing as Executive Vice President in responsibilities mainly in the commercial November 2011 and was the Chief area at Nestlé USA and then, from 1991, Financial Officer from April 2012 until in Japan. Senior Area Manager for the May 2015. As of May 2015, she was Asian region of Nestlé Waters in Paris from 1995, he was appointed Executive Vice President then transferred to Taiwan in 1998 as Market Head. From of Nestlé S.A. in charge of Zone AOA 2000, Chris Johnson led the worldwide development and (Asia, Oceania and Sub-Saharan Africa). Wan Ling Martello implementation of GLOBE (Global Business Excellence; IS/IT), came to Nestlé S.A. from Walmart Stores Inc., where she the Strategic Supply Chain as well as eNestlé. He was was EVP, Global eCommerce in 2010 and 2011. From 2005 appointed Deputy Executive Vice President in April 2001, to 2009, she was SVP, CFO & Strategy for Walmart and later moved back to Japan in 2007 as Market Head. International. Prior to Walmart, Wan Ling Martello built From January 2011 to October 2014, Chris Johnson was her career in the consumer packaged goods industry. She Executive Vice President responsible for Zone Americas. worked at Kraft in increasingly broader finance roles from Effective October 2014, he was appointed Executive 1985 to 1995. She was the Corporate Controller at Borden Vice President of Nestlé S.A. in charge of Nestlé Business Foods during its turnaround years owned by KKR in 1995 Excellence. until 1998. Wan Ling Martello was the CFO and then the Chris Johnson is a Board member of GS1, Belgium and President of the U.S. business of NCH, a former subsidiary Treasurer of the Swiss-American Chamber of Commerce. of AC Nielsen, from 1998 to 2005.

Nestlé Corporate Governance Report June 2017 13 Executive Board

Wan Ling Martello serves on the Board of Alibaba Group Effective December 2013, Marco Settembri was appointed Holding Ltd., China. to the Executive Board of Nestlé S.A. as Executive Vice As a representative of Nestlé, Wan Ling Martello is President, Head of Nestlé Waters of the Nestlé Group. a member of the Board of Cereal Partners Worldwide S.A., As of January 2017, Marco Settembri was appointed Switzerland. Executive Vice President in charge of Zone EMENA (Europe, Middle East and North Africa). Stefan Catsicas As a representative of Nestlé, he is Board member of Stefan Catsicas started his career at Lactalis Nestlé Produits Frais S.A.S, France and of Cereal the pharmaceutical company Glaxo Partners Worldwide S.A., Switzerland. in Geneva, Switzerland, as Head of In addition, Marco Settembri is a member of the Boards Neurobiology at the company’s of FoodDrinkEurope and of the Association des Industries Institute of Molecular Biology. He de Marque de l’Union Européenne (AIM) in Belgium. continued his career in academia at the University of Lausanne as Professor François-Xavier Roger and Chairman of the Cell Biology and Morphology Institute, François-Xavier Roger joined Nestlé S.A. and later as Vice President Research and Professor of as Executive Vice President in July 2015 Cellular Engineering at the Swiss Federal Institute of as Chief Financial Officer. Technology (EPFL) in Lausanne, Switzerland. François-Xavier Roger came to In 2005, Stefan Catsicas co-founded a private group Nestlé S.A. from Takeda Pharmaceutical, of biotechnology companies and he returned to academia Tokyo, where he was CFO since 2013. in 2011 as Provost and Executive Vice President of the From 2008 to 2013, he was Chief King Abdullah University of Science and Technology in Financial Officer of Millicom based in Luxembourg. Saudi Arabia. As of 2000 to 2008, he worked as Chief Financial Officer Effective September 2013, Stefan Catsicas was appointed for Danone Asia, followed by Head of Finance, Treasury to the Executive Board of Nestlé S.A. as Executive Vice and Tax for the Danone Group based in Paris, France. President, Chief Technology Officer, Head of Innovation, Technology, Research and Development. Magdi Batato Furthermore, Stefan Catsicas serves on the Board Magdi Batato is a mechanical engineer of Biomedical Research Council of A*STAR, Singapore and a PHD in Energetics of the human as well as on the Board of “Fondation Solar Impulse”, body from the Ecole Polytechnique de Switzerland, the International Board of Governors of the Lausanne (EPFL). He spent few years New York Academy of Sciences, USA, and the Economic teaching in university and consulting Advisory Board of Swiss Innovation Park, Switzerland. before joining Nestlé S.A. in 1991 in Switzerland as Engineer in Industrial Marco Settembri Services, Energy & Environment. His factory and production Marco Settembri joined Nestlé S.A. management experiences took him to Germany, Lebanon with Nestlé Italiana in 1987 and was and South Africa. In 2004, he was transferred to Malaysia as entrusted with various responsibilities, Executive Director of Production and, in 2009, he moved to mainly in the PetCare area. He was Nestlé UK & Ireland as Head of Group Technical. In May appointed Managing Director of the 2012, he took up the position of Market Head Pakistan. Sanpellegrino water business in 2004 Effective October 2015, he was appointed Executive and largely contributed to the successful Vice President of Nestlé S.A. in charge of Operations. consolidation of the water activities in Italy and to the development of a strong export stream of the emblematic Italian brands. In 2006, he took over the position of Market Head in Italy in addition to his responsibility as Head of Nestlé Waters Italy. In 2007, Marco Settembri was appointed CEO of Nestlé Purina PetCare Europe.

14 Nestlé Corporate Governance Report June 2017 Executive Board

Peter Vogt Maurizio Patarnello Peter Vogt joined Nestlé S.A. in 1980 Maurizio Patarnello joined Nestlé S.A. as a trainee in marketing before being in 1993 and held several positions appointed in Japan as Product in Finance before moving to Specialist. He returned to the Swiss Sanpellegrino in 1999. In 2002, he was market in 1985. Starting 1987, appointed as Country Business Manager Peter Vogt resumed his international for Lebanon and Jordan, where he led career with a series of assignments in the development of the Nestlé Waters Asia, first as Manager Hong Kong, then as Marketing business. In September 2004, he joined the regional Division Manager in Malaysia in April 1990 and finally management team in Dubai and was promoted Chief as Market Head Sri Lanka until the end of 1995. In 1996, Operating Officer and Regional Business Head of Nestlé he returned to Europe to take over the Swiss Frozen Food Waters for Middle East and Africa. In 2007, Maurizio Patarnello & Ice Cream business and became Market Head Nordic took over the additional responsibility for Nestlé Waters Asia. Region in 2000. From 2002 to 2004, he was in charge of In October 2010, he was promoted to Market Head for the newly created Nestlé Ice Cream Europe unit. Peter Vogt Ukraine and Moldava. Maurizio Patarnello took up the returned to Asia as Market Head Indonesia in 2005 and was position of Market Head for Nestlé Russia and Eurasia nominated Market Head Malaysia and Singapore in 2009. Region in October 2012. As of March 2013, Peter Vogt was appointed to the Effective January 2017, he was appointed Deputy Executive Board of Nestlé S.A. as Deputy Executive Vice Executive Vice President of Nestlé S.A. and Head of President, Human Resources. Nestlé Waters.

Heiko Schipper Grégory Behar Heiko Schipper joined Nestlé S.A. Grégory (Greg) Behar joined Nestlé S.A. in 1996 as a trainee in marketing in 2014 as CEO of Nestlé Health Science. before being appointed in Bangladesh Greg Behar came to Nestlé S.A. from as Regional Sales Manager in the Boehringer Ingelheim Pharmaceuticals course of the same year. He was then, Inc., USA where he was President and in 1999, transferred to Nestlé Indonesia CEO since 2011. From 2010 to July 2011, as Group Product Manager Dairy. Greg Behar was Corporate Vice In 2003, he returned to Nestlé’s International Headquarters President Region NECAR (North European Union, Canada in Vevey, Switzerland, in the position of Marketing Advisor, and Australasia) for Boehringer-Ingelheim GmbH and was Dairy SBU. Starting 2005, Heiko Schipper resumed his its Corporate Vice President of the Cardiovascular and international career with a series of assignments in Asia. Metabolism Franchise from 2009 to 2010. Furthermore, First as Business Executive Manager, Dairy, Philippines, Greg Behar held previous roles at Bula & Fils, Nestlé and then as Business Executive Manager, Dairy (2007), as Novartis Pharma. As of January 2017, he was appointed Regional Business Head, Infant Nutrition & Dairy (2010), to the Executive Board of Nestlé S.A. and finally as Managing Director, Nestlé Food & Beverage Currently, he serves as Chairman of the Board of Nutrition Division of Nestlé Greater China Region. At the end of 2013, Science Partners, HK. Greg Behar is also a Board member he returned to Nestlé’s International Headquarters where of Accera, Inc., USA, Seres Therapeutics, Inc., USA, Aimmune he was appointed Global Business Head, Infant Nutrition Therapeutics Inc., USA and Axcella Health Inc., USA. at Nestlé Nutrition. As of October 2014, Heiko Schipper was appointed to the Executive Board of Nestlé S.A. as Deputy Executive Vice President, Head of Nestlé Nutrition.

Nestlé Corporate Governance Report June 2017 15 Executive Board

David P. Frick 2.3 Mandates outside Nestlé David P. Frick began his career at the Pursuant to art. 21sexies of the Articles of Association (*), Meilen District Court in Zurich and as no member of the Executive Board may hold more than an assistant to the Banking Law Chair 2 additional mandates in listed companies and 4 additional at Zurich University Law School. mandates in non-listed companies. Each of these mandates From 1994, he was an attorney is subject to a specific approval by the Board of Directors. in the International Corporate and The following mandates are not subject to these Litigation practice groups of Cravath, limitations: Swaine & Moore, the New York law firm. a) mandates in companies which are controlled by Nestlé; In 1999, he became Group General Counsel and Managing b) mandates which a member of the Executive Board holds Director of Credit Suisse Group, Zurich, where he was at the request of Nestlé or companies controlled by it. appointed a Member of the Executive Board and served No member of the Executive Board shall hold more as the company’s Head of Legal and Compliance. than 10 such mandates; and David P. Frick joined Nestlé S.A. in 2006 and serves as c) mandates in associations, charitable organizations, Senior Vice President, Corporate Governance, Compliance foundations, trusts and employee welfare foundations. and Corporate Services. No member of the Executive Board shall hold more He is a member of the Board of Allianz Suisse, than 10 such mandates. Switzerland. Furthermore, he is a member of the Board of Mandates shall mean mandates in the surpreme governing economiesuisse and chairs its Legal Commission. body of a legal entity which is required to be registered in David P. Frick represents Nestlé at SwissHoldings and the commercial register or a comparable foreign register. serves on the SIX Regulatory Board, ICC Switzerland and Mandates in different legal entities which are under joint the Legal Committee for the Swiss-American Chamber control are deemed one mandate. of Commerce. The Board of Directors has promulgated regulations that determine additional restrictions. All members of the Executive Board comply with the provisions set out in art. 21sexies.

2.4 Management contracts There are no management contracts with third parties at Nestlé.

(*) Nestlé S.A.’s Articles of Association can be found on www.nestle.com/investors/corporate-governance/articles

16 Nestlé Corporate Governance Report June 2017 General Organisation of Nestlé S.A. at 30 June 2017

Executive Board Ulf Mark Schneider François-Xavier Roger Laurent Freixe Magdi Batato Chris Johnson Peter Vogt Patrice Bula Heiko Schipper Wan Ling Martello Maurizio Patarnello Stefan Catsicas Greg Behar Marco Settembri David P. Frick

Chairman of the Board of Directors

Paul Bulcke

Nestlé Health Science Chief Executive Officer Nestlé Skin Health

Greg Behar Ulf Mark Schneider Stuart Raetzman

Corporate Governance Organizational Corporate Compliance & Human Resources Efficiency Communications Corporate Services

David P. Frick Wolfgang Pasewald Eugenio Simioni Peter Vogt

Nestlé Strategic Business Units, Innovation Operations Finance & Control Business Excellence Marketing and Sales Technology and R & D

Magdi Batato François-Xavier Roger Chris Johnson Patrice Bula Stefan Catsicas

Nestlé Waters Nestlé Nutrition

Maurizio Patarnello Heiko Schipper

Zone EMENA: Zone AOA: Zone AMS: Europe, Middle East & Asia, Oceania and Americas North Africa sub-Saharan Africa

Marco Settembri Wan Ling Martello Laurent Freixe

Nestlé Corporate Governance Report June 2017 17